Hazards of Nature, Risks to Development An IEG Evaluation of World Bank Assistance for Natural Disasters ppt

An IEG Evaluation of World Bank
Assistance for Natural Disasters
An IEG Evaluation of World Bank
Assistance for Natural Disasters
THE WORLD BANK
THE WORLD BANK
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Hazards of Nature,
Risks to Development
Hazards of Nature,
Risks to Development
Hazards of Nature, Risks to Development
Hazards of Nature, Risks to Development
The World Bank
Hazards of Nature_cover.qxd 5/4/06 1:39 PM Page 1
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/>Hazards of Nature_cover.qxd 5/4/06 1:39 PM Page 2
Hazards of Nature,
Risks to Development
An IEG Evaluation of World Bank
Assistance for Natural Disasters
2006
The World Bank
Washington, D.C.
WORLD BANK INDEPENDENT EVALUATION GROUP
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vii Acknowledgments
ix Foreword
xi Avant-propos
xv Prefacio
xix Executive Summary
xxvii Résumé analytique
xxxvii Resumen
xlvii Acronyms and Abbreviations
xlix Glossary
3 1 Nature, Disaster, and Recovery
5 Developing Countries and Natural Disasters
6 Response, Recovery, and Reconstruction
7 The World Bank and Natural Disasters
8 The Evaluation
9 Evaluative Instruments and Methods
11 2 The World Bank Responds
11 The Bank’s Natural Disaster “Portfolio”
14 Analytic Work
14 Concentrations in Lending Patterns
15 Reallocations
17 Project Performance
18 Outputs and Outcomes of Projects
19 Hazard Management in the Bank
23 3 Disasters and Bank Strategy
23 Predictability of Disasters
24 Planning Implications for the World Bank
24 Disaster Planning in Poverty Reduction Strategies

25 Disaster Planning in Country Assistance Strategies
Contents
29 4 Relevance of Bank Assistance
29 Defining Relevance of Disaster Assistance
31 Delivering Quick Support for the Immediate Response
32 Delivering New Projects for the Recovery
35 Reducing Vulnerability over the Longer Term
36 Does the Bank Respond Quickly?
38 Using a Long-Term View to Select Short- and Medium-Term Actions
43 5 Social Dimensions of Disaster
43 Participation in Natural Disaster Response
44 Shelter and Housing
46 Relocation
47 Vulnerable Groups
55 6 Bank Policy: Implementation and Implications
55 Natural Disasters in Relation to Other Emergencies
57 Emergency Recovery Lending Timeframe
58 Relief and Consumption Expenditures
59 Forms of Disaster Assistance
60 Rebuilding Physical Assets and Restoring Economic and
Social Activities
60 Recurring Disaster Events
60 Disaster-Resistant Construction Standards
61 Emergency Preparedness Studies
62 Technical Assistance on Prevention and Mitigation Measures
62 Addressing Longer-Term Disaster Issues
64 Procurement
64 Donor Coordination
66 Institutional Development
67 7 Conclusions and Recommendations

68 What Works in Developed Countries May Not Work Elsewhere
68 When to Engage and How to Stay Engaged
68 The Challenges Ahead: A Review of the Evidence
70 Lessons
72 Recommendations
75 Appendixes
77 A: Bank Policy and Products
83 B: Study Methodology
93 C: Supplemental Data—Chapter 2
109 D: Survey Results
129 E: Supplemental Data—Chapter 3
133 F: Supplemental Data—Chapter 4
147 G: Cash Support
153 H: Housing and Shelter
159 I: External Advisory Panel Comments
161 J: Management Response
171 K: Chairman’s Summary: Committee on Development Effectivess
(CODE)
iv
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
175 Endnotes
179 References
Boxes
4 1.1 Why Do Natural Disasters Seem to Be Increasing in Number?
6 1.2 A Troubled Relief Compromises the Ability to Recover
18 2.1 What Are Emergency Recovery Loans?
20 2.2 Other Organizations Have Institutional Structures for Disaster Risk
Management
25 3.1 Disaster Damage Undermines Development Progress
26 3.2 To What Extent Do CASs Develop Disaster-Specific Strategies

Appropriate to Prevailing Hazards?
31 4.1 Equipment Acquisition Can Be Particularly Problematic
32 4.2 A Sense of Urgency Can Lead to a Wasteful Response
35 4.3 Reducing Vulnerability May Also Reduce Poverty
36 4.4 Bank Helps Finance Insurance Scheme in Turkey
38 4.5 Damage Sustained Is a Function of a Community’s Level
of Vulnerability
38 4.6 Reducing Vulnerability Takes Time
40 4.7 Damage Assessments Are Useful But Have Some Shortcomings
48 5.1 The Poor Take the Heaviest Blow
50 5.2 Social Funds Can Be Part of a Rapid, Locally Based Response
59 6.1 Contingency Financing—A Learning Process
65 6.2 What Happens When the Bank Does Not Stay Engaged?
Figures
5 1.1 The Cost of Disaster Damage Is Rising
12 2.1 The Number of Projects Related to Natural Disasters Has Been
Rising, with Sharp Peaks in Lending about Every Five Years
13 2.2 The Bank Has Most Often Provided Lending for Disasters in Africa
and in Latin America and the Caribbean
16 2.3 Reallocations Peaked Following Each Policy Revision
17 2.4 Natural Disaster Portfolio Ratings: Projects Approved and
Completed, 1984–2005
34 4.1 Average Implementation and Extension Times for Projects
Containing Disaster Activities: All Disaster Projects
37 4.2 How Long Do Projects Take?
51 5.1 Projects Are Increasingly Addressing Women’s Vulnerabilities
56 6.1 The Use of ERLs Has Increased with Each Policy Revision
61 6.2 ERLs by Natural Disaster Type
63 6.3 Focus on Mitigation Has Increased with Each Successive Project
in Turkey

65 6.4 The Bank Often Leads Coordination, But Borrower Role Is Growing
Tables
8 1.1 Key Provisions of Current Bank Policy Statement
12 2.1 Natural Disaster Portfolio Composition, 1984 to 2005
15 2.2 Concentration of Lending in the Disaster Portfolio Compared with
Overall Bank Lending
CONTENTS
v
16 2.3 Ten Largest Loans for Disasters
19 2.4 A Dozen Lessons Learned from Natural Disaster Projects
25 3.1 Many CASs That Should Discuss Natural Disasters Do Not
26 3.2 Natural Disaster Risk Can Be Mainstreamed in the Bank’s Lending
30 4.1 The 10 Most Frequently Pursued Activities
48 5.1 Some Projects in the Portfolio Have Been Designed to Reach the Poor
49 5.2 Projects Often Exceeded Expected Impact on the Poor,
But Data Are Incomplete
66 6.1 Project Performance Drops Sharply with More Than Three Partners
vi
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
vii
Acknowledgments
T
his evaluation of the World Bank’s experience with natural disasters was
done by the Independent Evaluation Group–World Bank at the re-
quest of the Bank’s Board of Executive Directors. It comes at an ap-
propriate time. Natural disasters are affecting development in many countries,
setting back hard-won development gains.
In consequence, lending for natural disasters is
a growing business for the Bank. The lessons
produced by this evaluation are expected to

inform good practice and ensure the achieve-
ment of results in Bank activities. The evaluation
is also intended for use in an ongoing revision of
the Bank’s policy statement on emergency
assistance.
The evaluation was conducted under the
leadership of Ronald S. Parker, and this report
was written by Ronald Parker and William
Hurlbut, with inputs from Anna Amato, Mark
Emmert, Silke Heuser, and Kristin Little. Helen
Phillip provided administrative support. Caroline
McEuen edited the manuscript for publication.
Peer reviewer Alexandra Ortiz provided valuable
comments on earlier drafts of the report.
The authors gratefully acknowledge the
members of the Advisory Committee—Mary
Anderson, Ian Davis, Prema Gopalan, and Franklin
McDonald—for their early guidance and their
patient and detailed review of drafts of this report.
We also gratefully acknowledge the financial
support provided by our partner, the Swiss Agency
for Development and Cooperation (SDC), which
made possible a considerable amount of the
background research upon which this evaluation is
based. We also thank Margaret Arnold, Alcira
Kreimer, and Zoe Trohanis of the Hazard Manage-
ment Unit, and Bank task manager Francis
Ghesquiere. The study conducted several field
missions. The authors thank Y´yld´yz Aydin, Murat
Sungur Bursa, Dawn French, Ali Ihsan, Cheryl

Mathurin, Francisco Rivas, S.A.M. Rafiquzzaman,
Kuljit S. Sidhu, and Krishna S. Vatsa for their support
and valuable insights during these missions.
A database of project information created for
this evaluation brought together for the first
time all the available information on every Bank
project that had disaster-related activities. This
database will be turned over to the Hazard Risk
Management Team of the Urban Unit.
Director-General, Evaluation: Vinod Thomas
Director, Independent Evaluation Group, World Bank: Ajay Chhibber
Manager, Sector, Thematic, and Global Evaluation: Alain Barbu
Task Manager: Ronald S. Parker
ix
Foreword
N
atural disasters occur throughout the world, but their economic and
social impacts have been increasing and are generally much greater
in developing countries than in developed ones. Disasters can wipe
out development gains and eclipse years of development investment.
In Mozambique, Bank lending financed the
construction of 487 schools over a 20-year
period, but just one recent disaster, the floods of
2000, damaged or destroyed about 500 primary
schools as well as 7 secondary schools. The
Kashmir earthquake of October 2005 caused an
estimated $5 billion in damage in Pakistan,
roughly equivalent to the total official develop-
ment assistance for the preceding 3 years, and

equivalent to the amount the World Bank had
lent to the country over the preceding 10 years.
Until recently, disasters were treated as one-
time, random events by governments and the
agencies that helped them respond. But we
know from experience that disasters strike with
regular periodicity—and repeatedly in some
parts of the world. The potential for disaster is
foreseeable to the extent that it is possible to
predict generally where an event is likely to
occur at some time in the near future (but not
precisely when or its magnitude). Hence, low-
lying coastal areas on the Bay of Bengal will
experience more flooding, and small island
states in the Caribbean and countries along the
Gulf of Mexico will be repeatedly hit by
hurricanes.
The Bank and much of the development
community must take into account in their
strategies how frequently disasters occur, and
how often they strike the same countries. The
Bank’s lending shows that disasters follow a
clear pattern: Ten borrowers accounted for 208
of the 528 disaster-related projects (39 percent)
in the portfolio over the 1984–2005 period. Bank
lending commitments also are concentrated—
7.5 percent of projects received 32 percent of
the financing.
Disaster is still sometimes treated as an
interruption in development rather than as a

risk to development in the approaches of both
the country and the Bank. Of current assistance
strategies for countries that have received Bank
support in natural disasters, 44 percent did not
mention them. Even in the 40 countries that
have had 4 or more disaster projects, one-third
of the strategies did not mention disaster. And,
for the subset of countries that had an extensive
history with disasters (more than 8), about a
third did not mention disasters at all. Project
loan documents rarely consider natural events
as a risk, even in highly vulnerable countries,
although 176 projects were adversely affected
by disaster during implementation. We need to
find ways to integrate these risks more centrally
into development assistance to improve
effectiveness.
It should be recognized that the Bank has
demonstrated considerable flexibility in its
approach to natural disasters and has learned to
manage large and small responses well. Bank
staff have often been innovative and have
demonstrated the capacity to manage massive
reconstruction on many levels: more than 60
different kinds of activities have been
undertaken in disaster-related projects, ranging
from rubble clearance to construction of
transport infrastructure systems.
The Bank has also demonstrated its ability to
work with donors in a shared response and has

adapted policies and procedures to ensure that
assistance can be delivered expeditiously. Joint
damage assessments have become an important
mechanism for engaging with other donors and
ensuring that borrower needs are met without
overlaps.
Almost 80 percent of Bank-financed natural
disaster projects were rated satisfactory for
outcomes, compared with the Bankwide
average of 72 percent for the same period.
These ratings reflect particular effectiveness in
rebuilding physical infrastructure and in
provision of materials and equipment. In
general, though, disaster responses have tended
toward the reactive and tactical, when a
proactive and strategic approach would have
had longer-term benefits. Furthermore,
attention to the poor has been especially
difficult to accomplish in disaster projects.
When disaster strikes, funds are needed
immediately, and are often diverted from
development because no contingency funding
is available. The financial cost of responding to
the most recent events has stimulated interest
in creating global and regional funding
solutions. But even if these are eventually
established and the Bank decides to be a part of
such solutions, the Bank’s engagement with
client countries will have to ensure continued
focus on avoiding the next disaster, rather than

waiting for it to happen. Countries need to
become more proactive rather than reactive,
and Bank support to countries must do more to
encourage this shift.
The funding mechanisms used by the Bank
need to be rethought: balance of payment
lending has been relatively quick-disbursing, but
disbursement often does not take place in the
post-disaster period. The Bank has increasingly
used the Emergency Recovery Loan (ERL) in
responding to disaster, even when other instru-
ments may be more appropriate to achieving
long-term reduction of vulnerability. Several
attempts to establish insurance and contingency
financing have helped focus government
attention on the development issues of
disasters, but too few have been completed and
evaluated to judge their value. Finally, loan
reallocations are used much more frequently
than other types of Bank disaster responses in
highly vulnerable countries, putting develop-
ment goals at risk.
This report recommends several adjustments
to the way the Bank currently handles natural
disasters. First, it suggests revisions to policy to
better guide staff and enhance flexibility of Bank
responses to natural disasters. Second, it
encourages increased Bank capacity to respond
to disasters and to ensure that it can be
mobilized quickly. Finally, it recommends that

the Bank prepare a strategy or action plan for
natural disaster assistance that includes an
assessment of each country’s level of disaster
risk, and differentiation of approach on the basis
of that assessment.
x
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
Vinod Thomas
Director-General
Evaluation
xi
Avant-propos
L
es catastrophes naturelles se produisent partout dans le monde, mais leurs
effets économiques et sociaux se font de plus en plus sentir et sont en
général beaucoup plus importants dans les pays en développement que
dans les pays développés. Les catastrophes peuvent anéantir les progrès en
matière de développement et éclipser des années d’investissement en faveur
du développement.
Au Mozambique, les prêts de la Banque ont fi-
nancé la construction de 487 établissements sco-
laires sur une période de 20 ans, mais une
catastrophe récente, à savoir les inondations de
2000, a à elle seule endommagé ou détruit en-
viron 500 écoles primaires ainsi que sept éta-
blissements secondaires. Au Pakistan, le
tremblement de terre du Cachemire en octobre
2005 a provoqué des dégâts estimés à 5 mil-
liards de dollars, soit à peu près l’équivalent du
total de l’aide publique au développement des

trois années précédentes, et l’équivalent du
montant des prêts accordés à ce pays par la
Banque au cours des dix années précédentes.
Jusqu’à une période récente, les catastrophes
étaient traitées comme des événements isolés et
aléatoires par les gouvernements et les orga-
nismes qui les aidaient à y faire face. L’expé-
rience nous apprend toutefois que les
catastrophes frappent certaines régions du
monde avec une périodicité régulière, et de
façon répétitive. L’éventualité d’une catastrophe
est prévisible dans la mesure où il est possible
de prédire, en général, à quel endroit un évé-
nement est susceptible de se produire à un cer-
tain moment dans un avenir proche (mais pas le
moment ou l’ampleur précis d’un tel événe-
ment). On sait ainsi que les zones côtières à
basse altitude de la Baie du Bengale subiront
davantage d’inondations, et que les petits États
insulaires des Caraïbes et les pays du Golfe du
Mexique seront frappés à maintes reprises par
des ouragans.
Dans leurs stratégies, la Banque et une grande
partie de la communauté de développement
doivent tenir compte de la fréquence des catas-
trophes et de la régularité avec laquelle elles
frappent les mêmes pays. L’analyse des opéra-
tions de prêt de la Banque révèle une tendance
claire dans l’avènement des catastrophes : dix
emprunteurs ont bénéficié de 208 (39 %) des 528

projets liés aux catastrophes du portefeuille pen-
dant la période 1984–2005. Les engagements de
prêt de la Banque sont également concentrés —
7,5 % des projets ont bénéficié de 32 % du fi-
nancement.
Dans leurs approches, le pays et la Banque
continuent de traiter parfois les catastrophes
comme une interruption du développement, et
non comme un risque pour le développement.
Parmi les stratégies d’aide actuelles en faveur des
pays ayant bénéficié d’un appui de la Banque à
la suite de catastrophes naturelles, 44 % ne men-
tionnaient pas ces dernières. Même dans le cas
des 40 pays qui ont bénéficié de quatre projets
ou plus liés aux catastrophes, celles-ci n’étaient
pas mentionnées dans un tiers des stratégies. En
outre, dans les stratégies d’environ un tiers du
sous-ensemble des pays où se produisent de
nombreuses catastrophes (plus de huit), ces
dernières n’étaient pas du tout mentionnées.
Les documents de prêt des projets considèrent
rarement les événements naturels comme un
risque, même dans les pays très vulnérables,
bien que les catastrophes aient eu un effet dé-
favorable sur 176 projets pendant leur exécution.
Nous devons trouver des moyens de placer ces
risques davantage au cœur de l’aide au déve-
loppement afin d’en améliorer l’efficacité.
Force est de reconnaître que la Banque a fait
montre d’une flexibilité considérable dans son ap-

proche des catastrophes naturelles et qu’elle a ap-
pris à gérer efficacement les grandes et les petites
interventions. Les services de la Banque ont sou-
vent fait preuve d’innovation et mis en évidence
leur capacité de gérer des travaux massifs de re-
construction à nombre de niveaux : dans le cadre
des projets liés aux catastrophes, plus de 60 dif-
férents types d’activités ont été entreprises, allant
du dégagement des débris à la construction de
réseaux d’infrastructures de transport.
La Banque a par ailleurs démontré son apti-
tude à travailler avec les bailleurs de fonds dans
le cadre d’une intervention collective, et elle a
adapté ses politiques et ses procédures pour as-
surer une prompte fourniture de l’aide. Les éva-
luations conjointes des dégâts sont devenues
un important mécanisme permettant de colla-
borer avec les autres bailleurs de fonds et de
veiller à ce que les besoins des emprunteurs
soient satisfaits sans créer de chevauchement.
Près de 80 % des projets relatifs aux catas-
trophes naturelles financés par la Banque ont été
jugés satisfaisants du point de vue de leurs ré-
sultats, par rapport à une moyenne de 72 % en-
registrée à l’échelle de la Banque pour la même
période. Ces notes témoignent de l’efficacité de
la Banque dans le domaine de la reconstruction
des infrastructures physiques et celui de la four-
niture de matériel et d’équipements. En général,
toutefois, les interventions relatives aux catas-

trophes ont eu tendance à être réactives et tac-
tiques, alors qu’une approche proactive et
stratégique aurait été avantageuse à plus long
terme. Qui plus est, dans les projets liés aux ca-
tastrophes, il a été tout particulièrement difficile
de prêter attention aux pauvres.
Lorsque la catastrophe frappe, les fonds sont
immédiatement nécessaires et ils sont souvent
réaffectés au détriment du développement, car
il n’existe pas de financement pour imprévus. Le
coût financier des interventions réalisées au titre
des plus récents événements a stimulé l’intérêt
envers la création de mécanismes de financement
mondiaux et régionaux. Mais même si l’on finit
par établir de tels mécanismes et qu’elle décide
d’y participer, la Banque devra s’attacher en per-
manence, dans le cadre de son engagement au-
près des pays clients, à éviter la prochaine
catastrophe plutôt qu’à attendre que celle-ci se
produise. Il convient que les pays deviennent
proactifs au lieu de se contenter de réagir, et l’ap-
pui accordé par la Banque aux pays doit faire da-
vantage pour encourager ce changement.
Les mécanismes de financement dont se sert
la Banque méritent d’être repensés : les prêts à
l’appui de la balance des paiements se caracté-
risent certes par un décaissement relativement
rapide, mais souvent aucun décaissement ne
s’effectue durant la période qui suit la catas-
trophe. Dans ses interventions en cas de catas-

trophe, la Banque recourt de plus en plus aux
prêts d’urgence aux pays sinistrés, même lorsque
d’autres instruments peuvent être mieux indi-
qués pour réduire la vulnérabilité à long terme.
Plusieurs tentatives de mise en place de fonds
d’assurance et de fonds pour imprévus ont
contribué à attirer l’attention des gouverne-
ments sur les problèmes de développement que
posent les catastrophes, mais trop peu de ces
fonds ont été créés et évalués pour qu’on juge
de leur valeur. Enfin, dans les pays très vulné-
rables, la Banque recourt beaucoup plus fré-
quemment à la réaffectation des prêts qu’à ses
xii
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
autres types d’interventions liées aux catas-
trophes, ce qui compromet les objectifs de dé-
veloppement.
Le présent rapport recommande plusieurs
ajustements à la façon dont la Banque réagit ac-
tuellement face aux catastrophes naturelles. Pre-
mièrement, le rapport propose des révisions à
apporter à la politique afin de mieux guider le
personnel et de rendre encore plus flexibles les
interventions de la Banque liées aux catastrophes
naturelles. Deuxièmement, il encourage le ren-
forcement de la capacité de la Banque de réagir
face aux catastrophes et d’assurer une mobili-
sation rapide de ses ressources. Enfin, le rapport
recommande à la Banque d’élaborer une stra-

tégie ou un plan d’action pour l’aide en cas de
catastrophe naturelle qui prévoit une évalua-
tion du niveau de risque de catastrophe de
chaque pays, et l’adoption de méthodes d’ap-
proche différentes sur la base de cette évaluation.
AVANT-PROPOS
xiii
Vinod Thomas
Directeur général, Évaluation
xv
Prefacio
L
os desastres naturales se producen en todo el mundo, pero su impacto
económico y social ha ido en aumento y suele ser mucho mayor en los
países en desarrollo que en los desarrollados. Estos fenómenos pueden
arrasar con el progreso logrado en materia de desarrollo y significar años de
retroceso en las inversiones en desarrollo.
En Mozambique, el Banco financió la construcción
de 487 escuelas en un período de 20 años, pero
tan sólo un desastre ocurrido recientemente —
las inundaciones del año 2000— dañó o destruyó
unas 500 escuelas primarias y siete escuelas se-
cundarias. El terremoto de Cachemira de octubre
de 2005 provocó daños por unos US$5.000 mi-
llones en Pakistán, que equivalen aproximada-
mente al total de la asistencia oficial para el
desarrollo de los tres años anteriores, y a los re-
cursos que el Banco Mundial había prestado a ese
país en los 10 años precedentes.

Hasta hace poco, los gobiernos y los organis-
mos que los ayudaban a responder ante las emer-
gencias producidas por los desastres consideraban
que éstos eran acontecimientos únicos y al azar.
Sin embargo, sabemos por experiencia que los de-
sastres naturales se producen con cierta periodi-
cidad, y que en algunas partes del mundo ocurren
repetidamente. La posibilidad de que ocurra un
desastre puede preverse en la medida en que sea
posible predecir en términos generales dónde
es probable que se produzca un acontecimiento
en el futuro cercano (aunque no exactamente
cuándo o con qué magnitud). Por lo tanto, las
zonas de litoral bajo de la bahía de Bengala ten-
drán más inundaciones, y los pequeños Estados
insulares del Caribe, así como los países del golfo
de México, sufrirán repetidamente los embates de
los huracanes.
El Banco y gran parte de la comunidad del de-
sarrollo deben tener en cuenta en sus estrate-
gias la frecuencia con que se producen los
desastres y con que éstos azotan a los mismos pa-
íses. El financiamiento concedido por el Banco
muestra que los desastres siguen un patrón defi-
nido: de los 528 proyectos relacionados con de-
sastres naturales (39%) que conformaban la cartera
en el período de 1984-2005, 208 correspondían
a 10 prestatarios. Los compromisos de préstamo
del Banco también muestran una determinada
concentración: el 7,5% de los proyectos recibie-

ron el 32% del financiamiento.
En algunos casos, en los planteamientos tanto
de los países como del Banco, los desastres se si-
guen considerando como una interrupción del
proceso de desarrollo en lugar de un riesgo para
dicho proceso. En el 44% de las actuales estrate-
gias de asistencia a los países que han recibido
apoyo del Banco en relación con desastres natu-
rales no se hace mención de tales fenómenos. In-
cluso en los 40 países en que se han realizado cua-
tro o más proyectos relacionados con desastres
naturales, un tercio de las estrategias omitió toda
mención a ellos. Asimismo, aproximadamente
un tercio del subconjunto de países que tenían
una vasta trayectoria de desastres (más de ocho)
no hizo mención alguna a estos fenómenos. En
los documentos de préstamo rara vez se considera
que los fenómenos naturales constituyen un
riesgo, ni siquiera en los países muy vulnerables,
pese a que 176 proyectos se vieron afectados ad-
versamente por un desastre durante su ejecu-
ción. Para aumentar la eficacia, debemos encontrar
la manera de integrar mejor estos riesgos en la asis-
tencia para el desarrollo.
Hay que reconocer que el Banco ha demos-
trado mucha flexibilidad en lo que respecta a los
desastres naturales y ha aprendido a proporcio-
nar respuestas adecuadas en pequeña y gran es-
cala. El personal del Banco a menudo ha recurrido
a métodos innovadores y demostrado la capaci-

dad de hacer frente a reconstrucciones en gran
escala en muchos niveles: se han emprendido
más de 60 tipos diferentes de actividades en pro-
yectos relacionados con desastres naturales, desde
la remoción de escombros hasta la construcción
de sistemas de infraestructura para el transporte.
El Banco también ha demostrado su capacidad
para trabajar con los donantes en operaciones
de respuesta conjuntas y ha adaptado sus políti-
cas y procedimientos para asegurar que la asis-
tencia llegue en forma expedita. Las evaluaciones
conjuntas de los daños se han convertido en un
mecanismo importante para entablar una rela-
ción con otros donantes y asegurar que no haya
duplicación de esfuerzos en la atención de las
necesidades de los prestatarios.
Casi el 80% de los proyectos sobre desastres
naturales financiados por el Banco fueron califi-
cados de satisfactorios en cuanto a sus efectos di-
rectos, en comparación con un promedio de 72%
en igual período a nivel de todo el Banco. Estas
calificaciones son indicativas de la particular efi-
cacia del Banco en la reconstrucción de infraes-
tructura física y el suministro de materiales y
equipo. En general, sin embargo, la respuesta
ante los desastres ha sido más bien reactiva y tác-
tica, en circunstancias en que un criterio proac-
tivo y estratégico habría producido beneficios a
más largo plazo. Además, en los proyectos rela-
cionados con desastres naturales ha sido espe-

cialmente difícil atender las necesidades de la
población pobre.
Cuando se produce un desastre, la necesidad
de recursos financieros es inmediata y a menudo
estos fondos se desvían de otros programas de de-
sarrollo porque no se dispone de financiamiento
para situaciones imprevistas. El costo financiero
que ha significado la respuesta frente a los acon-
tecimientos más recientes ha despertado el inte-
rés en encontrar soluciones para movilizar
recursos a nivel mundial y regional. Pero incluso
si se llegaran a establecer estas medidas y el Banco
decidiera formar parte de esas soluciones, en su
participación y compromiso con los países clien-
tes éste debería asegurarse de que se preste aten-
ción permanente a las actividades de prevención
de un próximo desastre, en lugar de esperar hasta
que ocurra. Los países deben ser más proactivos
que reactivos y el apoyo del Banco debe alentar
en mayor medida este cambio de actitud.
Es preciso replantear los mecanismos de fi-
nanciamiento que emplea el Banco: los desem-
bolsos de préstamos para financiar la balanza de
pagos se han producido con relativa rapidez, pero
suele suceder que no haya desembolsos durante
el período posterior a un desastre. En medida cre-
ciente, el Banco ha otorgado préstamos de emer-
gencia para recuperación en respuesta a un
desastre, incluso cuando otros instrumentos po-
drían haber sido más adecuados para reducir la vul-

nerabilidad a largo plazo. Varios intentos de
establecer sistemas de seguro y fondos para im-
previstos han ayudado a centrar la atención de los
gobiernos en los problemas de desarrollo que oca-
sionan los desastres, pero son muy pocos los que
han llegado a término y se han podido evaluar
como para determinar su utilidad. Por último, en
los países muy vulnerables se recurre con mucha
mayor frecuencia a la reasignación de préstamos
que a otros tipos de respuesta del Banco ante si-
tuaciones de desastre, con el consiguiente riesgo
de no alcanzar las metas de desarrollo.
En el presente informe se recomiendan varios
ajustes a la manera en que el Banco enfrenta ac-
tualmente los desastres naturales. En primer lugar,
se sugiere examinar las políticas a fin de orientar
xvi
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
mejor al personal y aumentar la flexibilidad de las
respuestas del Banco cuando ocurren desastres
naturales. En segundo lugar, se alienta al Banco
a aumentar su capacidad para responder ante
tales situaciones y asegurar que pueda entrar en
acción sin demora. Por último, se recomienda
que el Banco elabore una estrategia o plan de ac-
ción para prestar asistencia en caso de desastres
naturales que incluya una determinación del nivel
de riesgo de cada país de sufrir desastres natura-
les, y la aplicación de distintos criterios sobre la
base de dicha evaluación.

PREFACIO
xvii
Vinod Thomas
Director General, Grupo de Evaluación Independiente
xix
Executive Summary
T
he impact of natural disasters on economic well-being and human suf-
fering has increased alarmingly. In the past year alone, the earthquake
and tsunami in the Indian Ocean killed an estimated 220,000 people and
left 1.5 million people homeless, catastrophic flooding and mudslides in
Guatemala killed hundreds of people, and a massive earthquake in Kashmir
killed tens of thousands more in Pakistan and India.
The death tolls are staggering, and the costs to
the human and economic development of the
affected countries are huge and rising. Natural
disasters are becoming more costly: in constant
dollars, disaster costs between 1990 and 1999
were more than 15 times higher ($652 billion in
material losses) than they were between 1950
and 1959 ($38 billion at 1998 values). The
human cost is also high: over the 1984–2003
period, more than 4.1 billion people were
affected by natural disasters. The number
affected has grown, from 1.6 billion in the first
half of that period (1984–93) to almost 2.6
billion in the second half (1994-2003), and has
continued to increase.
Although disasters caused by natural events

occur throughout the world, losses to disaster in
developing countries are generally much greater
than in developed countries in terms of
percentage of gross domestic product (GDP) or
government revenues. The disproportionate
effect on developing countries has many
explanations. Lack of development itself
contributes to disaster impacts, both because
the quality of construction often is low and
building codes, land registration processes, and
other regulatory mechanisms are lacking, as well
as because numerous other development priori-
ties displace attention from the risks presented
by natural events.
Most natural disasters are foreseeable to the
extent that it is possible to predict generally
where an event is likely to occur at some time in
the near future (but not precisely when or its
magnitude). Small island states in the Caribbean
and states along the coast of the Gulf of Mexico
will undoubtedly be repeatedly hit by hurri-
canes; Pacific Rim states in the “ring of fire” are
highly likely to be hit by earthquakes and
volcanic eruptions; low-lying coastal areas on
the Bay of Bengal are sure to experience more
flooding; and Africa will very likely experience
more drought. Therefore, it makes sense to treat
the hazards of nature as risks to development,
especially where they occur repeatedly.
Disasters dilute hard-won development

gains. In Mozambique, for example, Bank
lending financed the construction of 487
schools. But the most recent disaster alone, the
floods of 2000, damaged or destroyed about 500
primary schools as well as 7 secondary schools.
The damage caused can outweigh years of
development assistance. The Kashmir earth-
quake of October 2005 caused an estimated $5
billion in damage in Pakistan, roughly equivalent
to the total official development assistance for
the preceding 3 years, and equivalent to the
amount the World Bank had lent to the country
over the preceding 10 years.
There is no private insurance against hazard
risks in most developing countries. While about
half of these costs of natural disasters are covered
by insurance in the United States, less than 2
percent of the costs are covered in the develop-
ing world. In addition, the cost of hedging
against natural hazard risks in developing
countries often exceeds the cost of simply paying
for damages when they arise. Further, develop-
ing countries can generally count on aid from
outside sources, a well-known moral hazard in
the disaster field. For poor households, natural
hazards are just one of the many risks they face
and are unlikely to be a high priority.
When a disaster occurs, the key concerns for
the affected country are what to do, how to do
it, and how to fund the necessary response.

Typically, funds are needed immediately, and are
often diverted from long-term development
because no contingency funding is available.
The financial cost of responding to the most
recent events has stimulated particular interest
in creating global and regional funding
solutions. A proposal has been put forward for a
regional funding mechanism in Latin America,
and another proposal would expand an existing
UN program to provide a global contingency
funding mechanism.
The World Bank has been increasingly
engaged in helping countries to recover from
the disastrous impacts of natural events and to
reduce their future vulnerability. When the
World Bank responds to a natural disaster it has
a wide array of lending and nonlending services
from which to choose. And its response spans
multiple sectors and themes, including urban,
rural, environment, infrastructure, education,
health, and social protection.
Its nonlending services can include conven-
ing of donor meetings, provision of assistance
with post-disaster assessments, study prepara-
tion, and technical assistance. Bank lending
assistance can consist of funds reallocated from
existing projects, redesigns of planned projects,
or development of new projects using a variety
of lending instruments. In addition to its
advisory and analytic services and technical

support, since 1984 the Bank has financed 528
projects that addressed natural disasters,
representing more than $26 billion in lending.
The Independent Evaluation Group examined
the Bank’s experience in disaster response over
the past 20 years to extract lessons to inform
good practice and ensure the achievement of
results in Bank-supported activities. The evalua-
tion is also intended to inform an ongoing
revision of the Bank’s policy statement on
emergency assistance.
The Bank Response
The Bank has demonstrated considerable
flexibility in its approach to natural
disaster assistance and has learned to
manage responses to events ranging from
those of very large dimensions to smaller,
more limited events.
Bank staff have often been innovative in their
response to disaster events and have demon-
strated the capacity to manage reconstruction on
a massive scale. The study identified more than
60 types of activities undertaken in disaster-
related projects, ranging from rubble clearance
and provision of emergency shelter, to construc-
tion of flood shelters and transport infrastructure,
to institutional development.
Responses to disaster have included lending
and nonlending assistance, the latter including
disaster needs assessments, advisory assistance,

and other forms of technical assistance. Among
the responses that have demonstrated the Bank’s
flexibility and innovation are the Honduras Social
Investment Fund (1999), the Maharashtra
Earthquake Project (1997), North China Earth-
quake Reconstruction (1993), Yemen Emergency
Flood Reconstruction (1989), and the drought
prevention in Niger (1988), all of which dynami-
cally adjusted to prevailing conditions.
xx
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
The Bank also has demonstrated its ability
to work with donors in a shared response
and has adapted policies and procedures
to ensure that assistance can be delivered
expeditiously.
Donor coordination was particularly strong
for Hurricane Mitch in Honduras and Nicaragua
(1999); for the Marmara earthquake in Turkey
(2000); for drought in Sudan (1989); and for
flooding in Bangladesh (1999), Mozambique
(2000), and Gujarat (2002). Joint assessments
have become an important mechanism for
engaging with other donors and ensuring that
borrower needs are met without overlaps.
Natural disaster projects financed by the
Bank have had higher ratings for outcome
and sustainability than the Bank’s portfo-
lio as a whole.
Almost 80 percent of the projects that had

natural disaster reconstruction or mitigation as a
substantial element were rated satisfactory for
outcome, compared with the Bankwide average
of 72 percent for the same period. These ratings
reflect particular effectiveness in rebuilding
physical infrastructure and provision of materi-
als and equipment.
Sustainability ratings are similarly better than
average, but institutional development ratings
are about the same as the average. The sustain-
ability rating (for what is mostly infrastructure)
reflects the likelihood that estimated net
benefits will be maintained or exceeded over a
project’s intended useful life. Experience with
the creation of disaster management capacity
has shown that it often takes more than one
project cycle to leave behind a functioning
disaster institution where none existed.
But in general, disaster responses have
tended toward the reactive and tactical,
when a proactive and strategic approach
would have had longer-term benefits.
Countries affected by disaster, as well as the
donors that try to help them, including the Bank,
have generally treated disasters as interruptions
in development rather than as a risk that is
integral to development. At the country level,
few Country Assistance Strategies (CASs) and
Poverty Reduction Strategies (PRSPs) mention
natural disaster risks, even in countries that have

experienced multiple events resulting in major
disasters. At the project level, objectives have
mainly provided for short-term fixes and rarely
addressed the root causes of the disastrous
impacts of natural hazards.
The Bank has increasingly used the
Emergency Recovery Loan (ERL), the focus
of its emergency lending policy, in
responding to disaster, even when other
instruments may be more appropriate.
The ERL offers accelerated processing and a
short implementation period of three years, and
therefore has desirable qualities valued by both
borrower and Bank staff who respond to
disasters. ERLs generally have worked well and
have high outcome ratings. But accelerated
project processing is not always desirable. For
some projects, rushed appraisal has led to long
pauses between loan approval and first disburse-
ment, poorly designed interventions, and
diminished poverty impacts.
Furthermore, by relying on a three-year
lending period, the Bank may end up emphasiz-
ing activities that are expected to have short
implementation times, while not attending to
other activities that more fully address the needs
and vulnerabilities. It often happens that activi-
ties that might contribute greatly to the recovery
effort (and to the borrower’s subsequent long-
term development) are not included in the ERL

projects because they cannot be completed in
the three years allotted—and then the project
runs long in any event.
The crucial activities for long-term
reduction of vulnerability take longer than
three years to implement and have weak
borrower demand.
Only one of the 60 activities identified in Bank-
supported projects—balance of payment
assistance—has taken less than three years to
implement, on average. The types of activities
that can have the greatest impact on reducing
vulnerability, such as building code development
or revision, development of hazard risk manage-
ment institutions, and development of insurance
EXECUTIVE SUMMARY
xxi
and other mechanisms for laying off risk, are
precisely those for which borrowers are least
likely to borrow. The Bank needs to find ways to
encourage such activities.
Actions taken during the first weeks and
months after a disaster have a major
impact on the recovery process to follow,
and they need to be planned and
implemented accordingly.
Choices made immediately following a
disaster—regarding shelter, resettlement, debris
clearance, distribution of relief, and the like—
affect the later choices for longer-term solutions

and vulnerability reduction and can have severe
consequences for the ability of the poor to
recover.
Immediate post-disaster actions also need to
include the development of the capacities,
knowledge, and skills that will be required for
the recovery process. If studies are going to
produce knowledge that is critical to fully
informed project actions, they need a strong
advocate, such as the Bank. Capacity building
for procurement and preparation of bidding
documents should happen very early. Procure-
ment is among the project activities most
frequently cited in project-level evaluations as
needing improvement.
The Bank needs to be able to identify when
haste is counterproductive, lest funding
mechanisms rather than development
needs drive its response.
The funding mechanisms themselves need to
be rethought: balance of payment lending has
been a relatively quick-disbursing mechanism
but, on average, it is nowhere near as fast as it was
supposed to be, and it has only helped in very
limited circumstances. Several Bank-supported
attempts to establish mechanisms to lay off risk
(insurance and contingency financing) have
helped focus government attention on the long-
term development issues surrounding disasters,
but too few have been completed and evaluated

to make an informed judgment about their value.
Finally, loan reallocations are used much more
frequently than other types of Bank disaster
responses in highly vulnerable countries.
Recovery for the poor requires particular
attention, but is especially difficult to
accomplish in disaster projects, and poverty
impacts are generally not well documented.
When Bank projects have targeted the poor,
they have often exceeded their expected
impact: of 51 projects with documented
impacts, 41 met or exceeded the expected
impact. However, data are incomplete and
documentation of the poverty impacts is thin.
Even in the difficult circumstances of a
disaster response, beneficiary participation
during the design and implementation stages is
essential to success. The benefits of participa-
tion were demonstrated in the 1993 Argentina
Flood Rehabilitation Project, which involved
beneficiaries in all stages of the project. The
interaction between beneficiaries and the local
authorities resulted in the timely availability of
construction materials and the accommodation
of local customs in the architectural design of
new houses. Bank staff observed that this
created ownership among beneficiaries and
increased maintenance.
Experience in Turkey and Chile shows that
cash transfers and the provision of livelihood

opportunities can be especially effective for the
poor. Experience also shows that women and
other vulnerable groups need special attention
following disasters, especially in ensuring
equitable treatment.
Reconstructed housing that is built using
disaster-resistant techniques and accord-
ing to the needs of occupants reduces
vulnerability.
Building codes can improve the quality of the
built environment, but in informal neighbor-
hoods that typically do not comply with code
requirements, safer building practices need to be
disseminated in different ways. Simplicity of
message is essential to the widespread adoption
of disaster-resistant technologies, as has been
amply demonstrated in India. Because temporary
housing is sometimes occupied for long periods
of time, some projects have built temporary
shelter to slightly higher standards so that it could
become another form of housing for the poorer
once the new housing is built.
xxii
HAZARDS OF NATURE, RISKS TO DEVELOPMENT
Moreover, if shelters are built using disaster-
resistant construction techniques, not only are
they safer for the displaced living in them, but
such construction also serves as an example that
people will see, that will then potentially
influence their future construction choices.

Simple techniques can be used to ensure resist-
ance in owner- or craftsman-built small houses,
more sophisticated techniques may be used in
engineer-designed buildings such as high-rises.
Bringing Risk Management into
Development Strategy
Natural hazard risks are highly concen-
trated, so special attention needs to be
given to planning ahead for disaster and to
reducing long-term vulnerability in
countries at highest risk.
Ten countries account for 208 of the 528
disaster projects (39 percent) in the Bank’s
portfolio. Bank lending also is concentrated in
commitment terms—7.5 percent of projects
received 32 percent of the financing. Natural
hazard risks are foreseeable for many countries,
yet those risks are infrequently considered in
country programs or in project financing, even
in highly vulnerable countries.
When formulating country lending programs
and project lending, the Bank needs to elevate
the importance of natural hazards, especially for
highly vulnerable countries. To do this
efficiently, borrowing countries need to be
categorized by vulnerability level. This report
presents one way to do this, dividing borrowers
into three groups according to level of vulnera-
bility (high, medium, and low, based on the
percentage of a country’s GDP at risk from two

or more natural hazards).
The high concentration of risk also
suggests that mechanisms are needed to
finance those risks or transfer them.
Even if global or regional funds are eventually
established, they will likely address only the
short-term liquidity needs of disaster-affected
countries. The Bank needs to be seen as a part
of such regional and global solutions, but it also
needs to continue to provide the longer-term
activities directed at vulnerability reduction.
The Bank’s long-term engagement with
client countries needs to ensure continued
focus on permanent vulnerability reduction.
The Bank has supported several research
initiatives on risk hedging and private sector
involvement in reconstruction financing.
Financial approaches to mitigating loss that are
receiving attention include: reinsurance with
catastrophe bonds, national homeowner
insurance programs, disaster funds, and microfi-
nance. Additionally, 10 Bank-funded projects are
beginning to explore national insurance
schemes (5 of which are ongoing and have not
been evaluated).
Coordination Inside and Outside the Bank
The Bank has the human resources capacity
to both respond to disasters and to address
long-term country needs related to hazard
risks, but mobilizing them is cumbersome.

The Bank has a cadre of committed and
experienced staff, but it lacks an effective way to
reliably bring that staff and relevant knowledge
to its borrowers, or even to its own task teams.
Since 1999 a three-person unit has assisted Bank
task managers with natural and technological
disasters and helped provide a more strategic
and rapid response. This group is supplemented
by a thematic group comprising more than 100
staff with disaster-related experience. However,
donors and client countries do not know who to
contact when they have routine questions about
disaster and related coordination. The current
arrangement has also effectively reduced the
visibility of the natural disaster theme within the
Bank. When a disaster strikes it can be difficult
to disengage knowledgeable and experienced
staff from their ongoing tasks.
Donor coordination is especially critical to
disaster relief and recovery, in part because
of the dynamic nature of the situation, but
also because disasters typically attract the
involvement of numerous donors.
Increasingly, borrowers themselves are
providing the necessary donor coordination,
but they continue to need assistance with
coordination, especially in the early stages of
relief and recovery.
EXECUTIVE SUMMARY
xxiii